Paper presented to BITWorld 99, Cape Town - South Africa, 30th June-2nd July,1999Please contact authors before quoting from paper.
Tele options for community business: an opportunity for economic development in Africa.
Len Holmes, The Business School, University of North London (at time of
Margaret Grieco, Professor of Organisation and Development Management, The
Business School, University of North London (at time of presentation)
This presentation will chart the recent technical and social developments in Africa which make electronic community business a practical policy option. It will identify the ways in which new technology can assist craft communities in Africa in the marketing and trading of their goods. Particular attention will be paid to the new tracking mechanisms provided by the globalisation of communication technology for ensuring that the appropriate rate of return is captured by the communities producing craft goods. The presentation will go on to explore the manner in which the Internet can be harnessed by local communities in the development of new lines of craft production. The paper will raise the issue of the electronic or virtual skilling in the craft community sector.
1. Globalisation and transparency: the engines of electronic community business.
The globalisation of information communication technology has largely been driven by the interests and needs of the developed world but the globalisation of information communication technology creates very real opportunities for the development of community business in remote, and not so remote, locations in the developing world. Historically, remote communities wishing to trade in and with global markets were obliged to do so through a hierarchy of brokerage structures which obscured the final value of products and commodities from the communities producing those self same goods and commodities. The consequence of this long standing lack of transparency has been a weakness in the bargaining position of primary producers and, in the case of Africa, a resulting underproduction of commodities for trade.
The new information communication technologies, with some appropriate customisation, enable rural communities producing craft and agricultural goods to routinely and reliably establish what prices those goods are now trading for, to establish the level of demand for such goods and to identify new market opportunities. Globalisation and transparency, with some appropriate software design, can serve to create a better economic environment for developing countries.
Initially, the development agencies were slow to wake up to the prospects e-commerce or e-assisted commerce presented for economic development in the developing world. Early discussions around the topic stressed the poor connectivity of many developing country locations and saw the globalisation of communications technology as a dynamic which would necessarily and inevitably disadvantage the developing world. In this hiatus, a number of developing country enterprises - good examples can be found in Ghana and Nigeria - used the Internet and its e-commerce capabilities to market their goods on web sites based in the developed countries making use of shadow warehousing in the developed world to ensure the ready distribution of these developing world goods (see http://www.geocities.com/margaret_grieco/kentecon/kente.html )
Further developments which moved the prospect of e-commerce for community business forward were the investment of the Canadian government in e-commerce sites for native peoples (http://nunavut.nu/ ) and the action of city states such as Singapore or countries such as China where the establishment of a highly developed e-commerce capability is a strategic goal In the meantime, development agencies have focused in a concentrated fashion in improving the connectivity of the various regions and countries of Africa and within this connectivity initiative and impulse e-commerce for community business has begun to emerge as a policy strand.
The e-commerce discussions on the World Bank initiated Global Knowledge web site are archived and give the researcher into this area a sense of the speed with which this field is developing (http://www.globalknowledge.org ). Similarly, the researcher visiting the International Telecommunications Union 'Electronic commerce for developing countries' web site (http://www.itu.int/ECDC/ ) or the UNDP e-commerce web site (http://www.undp.org/info21/e-com/e-main.html ) will gain a strong sense of the rapid emergence of this new techno-economic area in development management. These latter two web sites taken together give a relatively comprehensive portrayal of the state of the field: they carry e-commerce tool kits, extensive listings of on-line discussion papers, broad identifications of the key issues and themes involved in e-commerce from security considerations through to appropriate marketing strategies for different sectors of activity.
What these sites do not do is to view e-commerce from the perspective of the needs of grass root organisations and systematically identify the necessary adaptations or customisations in software which are necessary for community business in the developing world to gain the maximum from the new technical developments. Neither site provides a case base set of examples of problems experienced by grass roots organisations in utilising ecommerce in developing countries nor does either site provide a tool kit of solutions. Despite ITU's explicit statements of its goal of creating technology to serve developing country needs, the text on the web site represents more of a patching through of low tech systems in the developing world to the higher tech systems of the developed world rather than a fundamental rethink around how to provide low cost, high tech mobile systems for the poor and rural locations of the developing world. Discussions of technologies such as the Cyber tracker which enables non-literate rural people to participate in environmental management through a hand held, solar powered, satellite linked technology in South Africa do not appear on these web sites yet such technologies can readily be harnessed for e-commerce purposes. The focus is upon the adaptation of technology designed for developed world needs rather than upon the impetus of designing technology specifically to meet developing country needs in an age of the globalisation of communications.
Nevertheless, ITU has shown that even within the constraints of adapting existing technologies for developing country e-commerce use, as opposed to developing purpose designed developing country e-commerce technologies, considerable headway in the field of e-commerce can be made by the developing world. The following description of ITU's activities in this field taken from the ITU web site makes the case abundantly clear:
EC-DC uses a geographically distributed architecture that separates the components for building an electronic commerce system, so that developing countries can implement those components that use their current infrastructure; these interface with other components running elsewhere. This model was successfully demonstrated in an EC-DC pilot project with a South African micro business. It covers most mainstream business models for electronic commerce (direct selling, corporate purchasing, value chain, and financial and information services). In a typical scenario, a business presents goods or services on an online catalogue (located in a developing or least developed country). A consumer or business partner can select desired items from the business site and confirm purchase. When the purchase is confirmed, control is passed to the commerce server which transparently and securely processes the payment in real time. The commerce server performs all the necessary security, authentication and encryption procedures and informs the business to deliver the goods or services if the payment is valid. The funds for the transaction are transferred to the local bank account of the merchant or business. The commerce server would be shared by multiple independent businesses located in the region. EC-DC is a compelling demonstration for developing countries' business communities of the value of Internet-connected telecommunications to broaden markets by providing low-cost access to an international clientele. It is based on a working and reproducible model for implementing electronic commerce and empowers developing countries as global players to market their products and services in the global marketplace and receive a fair return on their investment.
A cutting edge agency in moving e-commerce forward as an economic strategy for the developing world is Peoplink. Peoplink, a not for profit organisation, is currently providing online services to community business in developing countries in the areas of marketing, sales, training of staff in e-competences and connecting remote businesses with information on the key players in the development domain ( http://www.peoplink.org/ ). Whilst Peoplink is clearly playing an important brokerage function in a context where global connectivity is far from complete and where 'patching through' is often the only immediate option for many grass root organisations, its not for profit characteristics are key. Neither the ITU nor the UNDP web site properly discuss the extent to which such not for profit agencies can perform important 'mall' functions - functions which are not dissimilar to those performed by the government sponsored Singapore and Chinese web sites.
Peoplink very clearly discuss the need for the amplification and replication of e-commerce based or assisted projects within the developing world: and they have had some considerable success in promoting the rhetoric of e-commerce for the developing world. Indeed, their activities, though without naming the organisation, were publicly discussed by Al Gore in one of his speeches applauding the power of the Internet. Unfortunately, development agencies have been slow to support the spread of e-commerce projects in developing countries - a point which has not been lost on the ITU:
Not only have the numbers of development agency sponsored e-commerce projects been rather light on the ground, and the investment in supporting institutions like Peoplink which can help 'grow' the developing country e-commerce sector scant, the uses to which e-technology can be put in the developing world have been over-narrowly defined. One thinker, an active participant in the Global Knowledge network sponsored by the World Bank ( http://www.globalknowledge.org ), with an interesting agenda of uses to which e-technology can be put in the rural areas of developing countries is Don Richardson. One of Don's recent postings on the Global Knowledge list provides an extensive agenda of action which can be taken within the e-domain to improve the lot of rural producers:
A visit to Don Richardson's web site (TeleCommons Development Group http://www.telecommons.com ) provides an indication of the full range of uses to which ICT can be put in rural and agricultural development: our concern here is to indicate that agencies and individuals interested in promoting e-commerce in rural areas of developing countries should not confine themselves to the ready made packages and solutions constructed to solve the marketing and sales needs of developed countries but should instead seek to identify the precise economic and technical circumstances of rural producers and develop solutions which meet these needs.
One implication of the globalisation of information communication technologies and the transparency that such systems are capable of bringing is that the neglect of e-commerce in the developing world by development agencies becomes itself transparent: similarly, e-commerce successes in the developing world become a matter of global routine knowledge. The Grameen bank provides us with one such example ( http://www.grameen.org ). The dynamics are present for e-commerce to take off in the developing world and the signs are that Africa is ready and eager to participate.2. From local to global market traders: the conjunction of communications technology and local craft.
The potential for Africa to move from local craft markets to a global market trader in crafts is already apparent. Africa, despite the many mistaken myths of underdevelopment, has a highly developed design culture. Ghana, which has already proven to be a very active user of the Internet, has a very highly developed craft and design culture - the Kente strips used by many black American to signal their symbolic and identity links with the African continent originate in Ghana.
For evidence on the strength of this design culture and of its movement into the new communications modality a visit to the web site of the textile designer Davi Lojo is a good first start www.africancrafts.com/davilojo. This textile designers' site provides the user with a guided path through own material and linked sites on Ghanaian cloth, its meaning and its production technology. It also provides the opportunity to order and buy African goods - as we have already seen, with some help from ITU, an African electronic shopping mall has been set up from the Steerage South African site. The Lojo site, however, does something much more. It deliberately and effectively leads the user through African culture rather than simply requiring the user to touch the button for the selection of a particular consumer, albeit cultural, good. This use of the web to introduce the outsider to African cultural values and context may very well over the longer term have the consequence of expanding the market for African cultural goods.
On the internet Ghana and Ghanaians, with a little help from some friends, have begun to live their culture through the new electronic form in which outsiders can participate. The diaspora of Ghanaians to the healthier economies of the west has produced the human resources acquaint with the power of the new technology and its new commercial forms, human resources which also have an active pride in their culture and display that pride in the patterns of cultural knowledge they make available to us on the internet. The internet has become the space in which a Kente connection has been built: entrepreneuring Ghanaians have started marketing cultural goods through the Internet; lead educational institutions have placed previously specialist knowledge on Ghanaian culture and cultural production on open access web sites; US trading companies have already recognised the mass market for African design goods and have started to place their catalogues of goods on the net; designers, dancers and musicians have all found the net a useful tool to bring a wider audience to the appreciation of the forms they create. Art is no longer in the age of mechanical reproduction, it is now art in an age of electronic interconnection. The relational patterns of culture can now be disseminated in a form which is cohesive and not fragmented: the boundaries of the book are outdated and the users of the new electronic forms have opportunities to describe patterns of cultural relations in a global framework which could only previously have been achieved within an on site, local framework.3. Fair trading: tracking the profits.
The leader in the field of electronic marketing and purchasing in Ghana (it also operates in Nigeria) is Hasa Ghana which has a high quality catalogue of cultural artefacts on electronic display and organised its distribution of goods to be serviced from Canada thus breaking the power hold of the bottlenecks found conventionally at African ports. Hasa Ghana export their goods to a warehouse in Canada and service the online visa card sales from that location.
Communities wishing to sell their goods would in the present in all probability have to develop a similar structure in order to provide customers with reliability and to grow their markets for craft goods. Ghanaian local communities could partner with a development aid agency or a reliable business partner on the warehousing and dispatch of goods and even on the electronic display and electronic sale of goods. Communities however could take a very active part in shaping the catalogues of what they want to sell. Indeed these are precisely the arrangements between ITU and Steerage South Africa as reported on the ITU and Steerage web sites.
The internet not only provides communities with the ability to catalogue their traditional crafts and artefacts in a way that will enable the market for these goods to grow but it also allows communities to have sight of what other use other locations make of their traditional fabrics and local materials. It can provide a vision of the trading opportunities open to a village or region which are not self evident within the locality itself. For example, Kente cloth itself could be harnessed to high quality, high revenue furniture design instead of being converted into small item tourist goods. The net can allow villagers in location to view the uses to which other communities put their traditional products in the bid for increased local revenue. The virtual catalogue not only enables design products to be displayed out to the external world but it also enables design enhancements and alternative uses to be displayed in.
The net can enable remote villages to find business partners in other locations closer to the final markets for the goods, and permits of a new division of labour and equally importantly a new division of the spoils. Remote villages can produce the fine craft goods which have high value especially when incorporated as a design feature into high value items. Crafting customised designs to meet the needs of wealthy but distant customers is now a possibility: the desired designs can be transmitted electronically (an arrangement which has long held in western carpet design and the Italian knitwear industry). The technology can coordinate the market for customised goods at low administrative costs and in a way not previously possible: a client seeking a special design would have had to make a physical journey or hired the services of an agent to commission and procure the design for her or him. If customised craft production on a spot market sounds an implausible arrangement between Africa and its overseas market then we should focus our attention on the Mid West Trade Group which is involved in the commissioning of high quality, customised woven goods from Africa on just such a base.
The production and use of African goods is not sufficient to ensure a growth in African community level resources - the price which African craftsmen receive for themselves in proportion to the total value the work sells for is clearly significant if craft production is to represent a source of major economic improvement.
The two commercial web sites we have described are not community businesses but community businesses could adopt the same techniques as these two sites and thrive. And even if community businesses do not set up independently of companies such as HasaGhana and the Mid West Trade group, they can obtain the information on the final retail prices of goods through web access whether this is directly or indirectly through a development worker or some other professional or technology literate person. Indeed, an adaptation of the Cybertracker technology discussed earlier could provide rural communities with transparency on the workings of the international market around the goods which they produce and with accurate information on what their share of the profit should be. Empowering rural bargaining may be a key step in the stimulation of an active African agro-processing and craft economy.
The transparency of the technology does not only permit craft persons to check out the rate they will receive against what is paid for goods on the external market, but it will also permit Ghanaian community business to monitor the performance and trustworthiness of their external business partners. The internet not only enables Americans to be local in Africa, it also enables Africans to be local in America. African community businesses could through new technology check the level of orders, the value of payments and the stock remaining in partners' warehouses through electronic administrative and stock control processes. A tradition of trust and obscure brokerage is now replaceable by the innovation of transparency and this increases the range of trading partners open to African community business. Long distance supervision of profits and sales are now more than possible - they are already a practice in a host of commercial arenas.
Within e-commerce business-to-business communications are growing 5 times faster than business-to-consumer transactions accounting for 80 per cent of total e-commerce ( http://www.undp.org/info21/e-com/e2.html ). In this context, the development of tracking technologies which enable a developing country community business to keep an e-monitor either directly or through communicators on its developed country partner is critical. As of yet, the development agencies are giving little sign that they recognise this development need.4. Opening arenas: internet access to alternative visions.
A key and well established constraint experienced by women is their lack of mobility: the multiple task loads of women, loads which have received substantial measurement and analysis over the last two decades, militate against women having ready access to travel and transport. At the same time as there has been increasing recognition of the mobility constraints experienced by women, there has been an increasing recognition of the extent to which women are underrepresented as entrepreneurs and in economic success in general. Recent OECD meetings have focused upon the need to gain greater participation of women in the ownership of small and medium enterprises (The financing of women-owned SMEs: assessment of good practices (1997) -http://www.oecd.org/dsti/sti/industry/smes/prod/finance.htm ) The adoption of e-commerce forms enable women to remain within the general area of their residence and yet participate in international trade: already upon the Internet there is substantial trading in craft goods, the type of goods which women can produce locally but upon which historically they have not been able to preserve their entitlement to the profit.
Linking e-commerce with gender development goals represents one of the alternative visions of economic empowerment that the Internet opens up yet the recent AFRFEM mail archives coordinated through ECA and the World Bank contain no significant contribution on ecommerce (http://www.globalknowledge.org ). Not only do e-forms of commerce have the benefit that they enable women to trade and to track the performance of that trading on an international stage without leaving their locality but they also have the benefit that they enable transactions to take place asynchronously. Women are typically time poor and often have limited time available to them within the working of their regular domestic day: asynchronous transaction enables women to undertake their trading activities when the rest of the world is asleep and not calling upon their services.
Yet another expansion of this alternative vision is afforded by women-organised community businesses. In many parts of the developing world, women group together in savings organisations, labour sharing circles and other forms of gender collective actions. The Grameen bank is noted for the extent to which it built upon such female work and savings groups: within Africa, female rotating box credit associations are pervasive. Linking e-commerce facilities to these indigenous female economic and commercial forms provides a useful path forward for the eradication of female poverty in Africa. The use of e-forms in the micro banking sector would enable local women's savings groups to link up with external banks who can easily accommodate such groups as part of their overall risk portfolio as compared with in country agricultural banks (banks which have all their customers in the same region so that when the harvest fails it is disastrous across the sector).5. Virtual skilling: training over distance
Virtual skilling has already arrived within the new global order in the form of distance learning: knowledge management and virtual skilling are the mirror images of the same process. Developing knowledge management systems which compartmentalise knowledge into thematic areas and sectors for ready delivery may reasonably be viewed as the fragmentation of experience: however, the technical capabilities of the new information communication technologies to enable the ready regrouping and recollecting of knowledge are critical. The use of video information relay to enable the integration of visual and semantic knowledge creates a new domain in which virtual skilling take place: similarly, the ability to integrate actor centred simulation of tasks enables the physical and practical learning of skills through virtual reality without any damage to material forms. Furthermore, through information technology the actions of a surgeon, or any practical actor, undertaken in the USA can now result in the performance of an operation in Russia.
Extending this learning discourse into e-commerce, there is no reason why skills and practices can not be transmitted into remote regions without mobility of the learning community having to take place. The development of new technical and economic skills no longer rests on the creation of specialised physical institutions. Entry to communities of practice no longer requires physical adjacency for demonstration and supervision of rehearsal. Where previously such adjacency, extended over time, was critical to the identity formation aspects of the learning process the new technologies afford readier access to the social practices of an arena of economic activity (see http://www.unl.ac.uk/relational/relskill/leed98b.htm for discussion of identity and learning).
Within the materials reviewed in the course of this paper, three strands of virtual skilling relevant to e-commerce for Africa emerged. The first strand was present on an African web site: the web site provided the visual and semantic materials necessary to undertake and replicate the traditional weaving skills of Ghana. The second strand was found on the Peoplink site where the training in skills necessary to e-commerce were articulated and advocated. The third strand was found on the ITU and UNDP electronic commerce web sites which provided down loadable tool kits for operation in the e-commerce domain.
Clearly, there is a need for some sustained and strategic thinking about the virtual skilling competences of the new technologies and the potential role they can play in integrating traditional skills into a modern economic base and developing new technical skills for integration into the new global economic order. In the sites reviewed, the relationship between the virtual skilling opportunities of the new information technology and gender e-commerce were particularly neglected. On the whole the view of the technology was one which stressed the ability of web sites to showcase women's craft production capabilities rather than one which focused upon equalising the technical order in terms of gender. There is an opportunity for
Africa to strategise virtual skilling within the context of e-commerce and change the terrain of female poverty: for this to happen a higher level of development agency sponsored e-commerce is imperative.
At present there is no good library of case examples of developing country e-commerce community business. For this reason, an initial sampling of cases available on the web is provided here with the intention of enlarging this case base over time so as to provide 'samplers' for would be e-community business in the developing world.A useful non-profit broker: the Peoplink web site:
This site provides access to information on a range of marketing, training and sales services available to developing country community business through the offices of Peoplink. The skills and technology awareness of Peoplink provide a useful starting point for developing country business which has not yet directly connected to markets, technology or development agency resources: the not for profit status of this broker should be noted. (See Peoplink's website: http://www.peoplink.org/ )ITU -Electronic Commerce for Developing Countries project: a policy signpost
Here is ITU's own description of their project:
'The project Electronic Commerce for Developing Countries (EC-DC), is an activity of the ITU Telecommunication Development Bureau (BDT) and its importance is highlighted in the ITU Strategic Plan. The ITU has a central role in the development of the global infrastructure used for electronic commerce, the promotion and co-ordination of programmes to accelerate the transfer of appropriate technologies to developing countries, is active in the development of widely used related standards (e.g., X.509 Digital Certificate) and has considerable experience in the development, implementation and co-ordination of electronic commerce projects.
The objectives of EC-DC are to:
E-technology for agricultural growth: a case from Peru.
A description of an agricultural e-project provided by UNDP:
An Internet connection set up in a Peruvian village helped the community establish a partnership with a company in New York and expand the market for their agricultural products. It resulted in a 5-time increase of income, from US$300 to US$1500 a month. Internet connectivity thus can provide an unparalleled opportunity to people in remote rural areas to expand their business activities beyond local confines to a a global reach. (From the UNDP electronic commerce web site http://www.undp.org/info21/e-com/e1.html )
An international African shopping mall: an ITU/ private sector partnership
The International Telecommunications Union provided the facilities upon which the private sector South African company, Steerage, could piggyback the development of an electronic international African shopping mall. Go to http://www.steerage.co.za/aism for further information on this experiment.